Required information [The following information applies to the questions displayed below.] Xcite Equipment Co. manufactures and markets a number of rope products. Management is considering the future of Product XT, a special rope for hang gliding, that has not been as profitable as planned. Since Product XT is manufactured and marketed independently of the other products, its total costs can be precisely measured. Next year's plans call for a $260 selling price per 100 yards of XT rope. Its fixed costs for the year are expected to be $304,200, up to a maximum capacity of 550,000 yards of rope. Forecasted variable costs are $182 per 100 yards of XT rope. 3. Prepare a contribution margin income statement showing sales, variable costs, and fixed costs for Product XT at the break-even point. XCITE EQUIPMENT CO. Contribution Margin Income Statement (at Break-Even) - Product XT Units $ per unit Total Contribution margin < Prev S 10 of 10 Next >

Required information [The following information applies to the questions displayed below.] Xcite Equipment Co. manufactures and markets a number of rope products. Management is considering the future of Product XT, a special rope for hang gliding, that has not been as profitable as planned. Since Product XT is manufactured and marketed independently of the other products, its total costs can be precisely measured. Next year's plans call for a $260 selling price per 100 yards of XT rope. Its fixed costs for the year are expected to be $304,200, up to a maximum capacity of 550,000 yards of rope. Forecasted variable costs are $182 per 100 yards of XT rope. 3. Prepare a contribution margin income statement showing sales, variable costs, and fixed costs for Product XT at the break-even point. XCITE EQUIPMENT CO. Contribution Margin Income Statement (at Break-Even) - Product XT Units $ per unit Total Contribution margin < Prev S 10 of 10 Next >

Essentials of Business Analytics (MindTap Course List)

2nd Edition

ISBN:9781305627734

Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Chapter15: Decision Analysis

Section: Chapter Questions

Problem 2P: Southland Corporation’s decision to produce a new line of recreational products resulted in the need...

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Praveen Co. manufactures and markets a number of rope products. Management is considering the future of Product XT, a special rope for hang gliding, that has not been as profitable as planned. Since Product XT is manufactured and marketed independently of the other products, its total costs can be precisely measured. Next year’s plans call for a $200 selling price per 100 yards of XT rope. Its fixed costs for the year are expected to be $270,000, up to a maximum capacity of 700,000 yards of rope. Forecasted variable costs are $140 per 100 yards of XT rope. Required 1. Estimate Product XT’s break-even point in terms of (a) sales units and (b) sales dollars. 2. Prepare a contribution margin income statement showing sales, variable costs, and fixed costs for Product XT at the break-even point.
806Praveen Co. manufactures and markets a number of rope products. Management is considering the future of Product XT, a special rope for hang gliding, that has not been as profitable as planned. Since Product XT is manufactured and marketed independently of the other products, its total costs can be precisely measured. Next year’s plans call for a $200 selling price per 100 yards of XT rope. Its fixed costs for the year are expected to be $270,000, up to a maximum capacity of 700,000 yards of rope. Forecasted variable costs are $140 per 100 yards of XT rope.RequiredEstimate Product XT’s break-even point in terms of (a) sales units and (b) sales dollars.Check (1a) Break-even sales, 4,500 unitsPrepare a contribution margin income statement showing sales, variable costs, and fixed costs for Product XT at the break-even point.
A number of costs are listed below that may be relevant in a decision faced by the management of Bulacan Company. Bulacan normally runs at capacity and the old Model CY1000 machine is the company’s constraint. Management is considering purchasing a new machine, Model CZ4000 and the old one, CY1000 will be sold. The new machine is more efficient and can produce 20% more units than the old one. Demand for Bulacan’s product is greater than what they can supply. If the new machine is purchased, there should be a reduction in maintenance costs however the new machine is very costly and the company will need to borrow money in order to make the purchase. The increase in volume will be large enough to require increases in fixed selling expense, but general administrative expenses will remain unchanged. Required: For each cost listed determine whether the cost is relevant or irrelevant to the decision to replace the CY1000. a. Sales Revenue b. Direct materials c. Direct labor d. Variable…
Concord Corporation manufactures widgets. Bowden Company has approached Concord with a proposal to sell the company widgets at a price of $88000 for 100000 units. The following costs are associated with Concord's production process when 100000 units are produced: Direct material Direct labor Manufacturing overhead Total $ 33000 29500 48500 $111000 Manufacturing overhead of $12150 of costs will be eliminated if the components are no longer produced by Concord. What is the incremental cost or savings to Concord if the widgets are bought instead of made? $23000 incremental savings $13350 incremental cost $10850 incremental savings $23000 incremental cost
Premo Pens, Inc., is in the process of developing a newpen to replace its existing top-of-the-line Executive Model.Market research has identified the critical features the pen must have, and it is estimated that customers would be will-ing to pay $30 for a pen with these features. Premo’s produc-tion manager estimates that with existing equipment it will cost $26 to produce the proposed model. The current Execu-tive Model sells for $24 and has a total production cost of $20. A competitor sells a pen similar to the proposed model,but without Premo’s patented easy retract feature, for $28. Itis estimated to cost the competitor $25 to produce. If Premoseeks to earn a 20 percent return on sales on the new model,which of the following represents the target cost for the newpen?a. $26.00.b. $22.40.c. $24.00.d. $19.80.
Orange Nebula Equipment Company (ONEC) manufactures a variety of harpooning equipment. The company would like to develop a unified approach to pricing its product line for next year using cost-plus pricing but does not know what cost base should be used. Last year, ONEC earned $150,000 of profit from sales of its products and would like to earn $225,000 next year. Last year, the company incurred the following costs: Manufacturing Costs: Variable 260,000.00 Fixed 160,000.00 Selling and Administraitve: Variable 90,000.00 Fixed 180,000.00 Calculate the Markup Percentage based on a cost basis of All variable and fixed costs. (provide your answer in % form to two decimal places, i.e. 37.428% = 37.43)
Crane Company has decided to introduce a new product. The new product can be manufactured by either a capital-intensive method or a labor-intensive method. The manufacturing method will not affect the quality of the product. The estimated manufacturing costs by the two methods are as follows. Direct materials Direct labor Variable overhead Fixed manufacturing costs (a) Crane' market research department has recommended an introductory unit sales price of $40.00. The selling expenses are estimated to be $622,000 annually plus $2.00 for each unit sold, regardless of manufacturing method. (b) Capital-Intensive $6.00 per unit $7.00 per unit $4.00 per unit Your answer is correct. $3,200,000 Calculate the estimated break-even point in annual unit sales of the new product if Crane Company uses the: 1. Capital-intensive manufacturing method. 2. Labor-intensive manufacturing method. Break-even point in units eTextbook and Media Labor-Intensive $7.00 per unit $10.00 per unit $5.50 per unit…
Orange Nebula Equipment Company (ONEC) manufactures a variety of harpooning equipment. The company would like to develop a unified approach to pricing its product line for next year using cost-plus pricing but does not know what cost base should be used. Last year, ONEC earned $150,000 of profit from sales of its products and would like to earn $225,000 next year. Last year, the company incurred the following costs: Manufacturing Costs: Variable 260,000.00 Fixed 160,000.00 Selling and Administraitve: Variable 90,000.00 Fixed 180,000.00 Calculate the Markup Percentage based on a cost basis of Total variable costs. (provide your answer in % form to two decimal places, i.e. 37.428% = 37.43)
Lingkod Company, a manufacturer of furniture sets, is considering to purchase the seat cushions neededfor its chairs. The expected purchase price of these seat cushions is P50 per unit. Lingkod has been making its own seat cushions since it started operating. If it would continue to producethese cushions, the company expects to incur the ff costs: Raw materials - P13, Direct labor-P15, variableOH-P5 and Fixed OH (based on the average production requirement of 10,000 units)-P20.Should the company continue to make the seat cushion or buy from outside supplier?
how can the changes below affect Mirabel’s overall cost structure. For those changes that are controllable, make a recommendation considering the uncontrollable cost changes. Be certain to consider not only the company’s break-even point, but also the desired margin of safety. If Mirabel purchases the new equipment for $1,200,000, it will increase fixed costs by 10% but will decrease the variable cost per unit for all 3 models by 5%. If Mirabel invests the additional $650,000 in fixed marketing expenses, sales of the Model 301 are expected to increase by 8%. If the projection is that sales will increase by 10% in the coming year. The sales volume remains fixed but there is a 5% increase in variable expenses (materials cost) for the Model 101 and 301, and a 10% increase in variable expenses for Model 201.
A large electronics manufacturer is considering outsourcing the manufacturing of a diaphragm used in its large speaker. The company estimates that annual fixed costs of manufacturing the part in-house, which include equipment, maintenance, and management, amounts to$6.9million. The variable costs of labor and material are$7per unit. The company has an offer from a major subcontractor to produce the part for \$12 per unit. However, the subcontractor wants the company to share in the costs of the equipment. The electronics company estimates that the total cost would be$3.4million, which also includes management oversight for the new supply contact. The company must consume more than diaphragms to make the manufacturing the part in-house option least costly. (Enter your response rounded up to the nearest whole number.).
Vista Company manufactures electronic equipment. It currently purchases the special switches used in each of its products from an outside supplier. The supplier charges Vista $5.50 per switch. Vista's CEO is considering purchasing either machine A or machine B so the company can manufacture its own switches. The projected data are as follows: Annual fixed costs Variable cost per switch Machine A $632,400 1.78 Required: 1. For each machine, what is the minimum number of switches that Vista must make annually for total costs to equal outside purchase cost? 2. What volume level would produce the same total costs regardless of the machine purchased? 3. What is the most profitable alternative for producing 235,000 switches per year and what is the total cost of that alternative? Required 1 Required 2 Required 3 Complete this question by entering your answers in the tabs below. Machine B $ 860,100 0.80 Minimum number of switches For each machine, what is the minimum number of switches that…